The National In-Country Value (ICV) program was implemented by the Ministry of Industry and Advanced Technology (MOIAT) to promote local industries and increase their contribution to the UAE’s GDP. The ICV certificate UAE is issued to suppliers who have demonstrated their contribution to the local economy, and this certificate gives them an advantage during the award of contracts and purchases based on their ICV score. However, the process of obtaining an ICV certificate UAE can be complex, and suppliers often make mistakes when submitting their documents. In this article, we will discuss some common pitfalls in document submission for ICV requirements in the UAE.
Failure to provide audited financial statements
One of the most common mistakes suppliers make when applying for an ICV certificate UAE is failing to provide audited financial statements. The audited financial statements are a critical document that verifies the supplier’s financial position, and they must be prepared by an independent certified public accountant in accordance with IFRS. The audited financial statements must not be older than two years from the certification year, and newly established companies who do not have audited financial statements can use Management Accounts for a period of up to nine months for ICV calculations. Failure to provide audited financial statements can result in the rejection of the ICV application.
Incorrect classification of the supplier’s company type
Another common mistake suppliers make when applying for an ICV certificate in UAE is incorrectly classifying their company type. Suppliers must choose the appropriate type from the drop-down list in the ICV Certificate Template, which includes Small and Medium Enterprises (SME) in UAE, Non-SME in UAE, and International Companies. The definition of SME is provided on the website of the National Program for Small and Medium Enterprises and Projects, and suppliers must be guided by this definition when selecting their company type. Failure to correctly classify the supplier’s company type can result in an inaccurate ICV score.
Failure to consider all costs incurred and revenue earned during the financial year
Suppliers must consider all costs incurred and revenue earned during the financial year when completing the ICV Certificate Template. This includes the cost of goods manufactured and purchased, third-party costs, investments, and the hiring and development of Emiratis. Failure to consider all costs and revenue can result in an inaccurate ICV score and may also result in penalties for the supplier.
Failure to use the correct ICV Certificate Template
Suppliers must use the correct ICV Certificate Template when applying for an ICV certificate UAE. The template can be downloaded from the MOIAT website, and it includes separate tabs for each of the attributes that are considered when calculating the ICV score. Suppliers must fill out the figures and other details in the non-shaded areas of the template, and any deviations from the template may result in the rejection of the ICV application.
Failure to provide supporting documentation
Suppliers must provide supporting documentation for the figures reported in the ICV Certificate Template. This includes the supplier’s audited financial statements, management accounts, and any other supporting documents used to generate the audited financial statements. Failure to provide supporting documentation can result in the rejection of the ICV application.
Incorrect currency conversions
Suppliers must ensure that all cost figures are in AED in the ICV Certificate Template unless specified otherwise. For currency conversions, the following shall be considered: 1 USD = 3.6725 AED. Other currency conversion shall be done based on the prevailing rate on the Purchase Order for goods/services. Failure to use the correct currency conversions can result in an inaccurate ICV score.
Incorrect consideration of consumption details
Suppliers must provide consumption details when completing the ICV Certificate Template. This includes listing by vendor and by invoice, and the differential of opening and closing stock should be adjusted as “others” to tie it back to consumption figure in the books of accounts. The “others” shall then be split into the same ratio of ‘total inside UAE costs’ and ‘total outside UAE costs’. Failure to provide consumption details can result in an inaccurate ICV score.
Failure to comply with the general instructions
Suppliers must comply with the general instructions provided in the ICV Certificate Guidelines. This includes obtaining an ICV certificate UAE for each legal entity of the supplier, ensuring that all figures entered in the ICV certificate template tally with the supplier’s latest audited financial statements, and obtaining an ICV certificate UAE from an authorized certifying body. Failure to comply with the general instructions can result in the rejection of the ICV application.
Failure to follow the ICV Certificate Template
Suppliers must strictly follow the ICV Certificate Template when generating their ICV score/certificate. The template can be downloaded from the MOIAT website, and suppliers must fill out the figures and other details in the non-shaded areas of the template. Any deviations from the template may result in the rejection of the ICV application.
Failure to consider the type of company for ICV calculations
Suppliers must consider the type of company when completing the ICV Certificate Template. This includes considering whether the supplier is an LLC in mainland UAE, a Free Zone company, a Goods Manufacturer, a Service Provider, an Offshore Company, or a Representative Office. Failure to consider the type of company can result in an inaccurate ICV score.
In conclusion, obtaining an ICV certificate UAE can significantly contribute to the success and growth of your business in the UAE. With the ICV certificate UAE, you can increase your chances of winning government contracts, improve your company’s reputation, and demonstrate your commitment to supporting the local economy. However, the ICV certification process can be complex, and it is essential to ensure that all requirements are met to avoid delays or rejections.
By seeking the guidance of ICV certificate consultant in the UAE, you can increase your chances of success and ensure that the certification process is completed efficiently and effectively.
